greedy landlord

The government has launched a new scheme which may see those who are on benefits having their money diverted to landlords, it has emerged.

A circular published by the Department for Work and Pensions on Monday revealed that tenant’s of social landlords will have their benefits transferred to their housing provider, if they accrue two months of arrears.

The universal credit system, which combines a number of benefits into one monthly payment to households, was trialled for new claimants in Ashton-under-Lyne near Manchester on Monday as part of a pathfinder project. Three further pathfinders in Wigan, Warrington and Oldham will start in July ahead of a national roll out of the scheme from October.

But the eight-week switch back system will result in tenants seeing their money transferred to their landlord.

Critics of the scheme have argued that this could potentially create financial delays for tenants in a vulnerable position – especially if they are a new tenant who is asked to pay eight weeks worth of rent upfront, as is the case with many rental agreements.

It could also create potential difficulties for landlords who may themselves encounter lengthy delays when it comes to rent and may thus be in a position where they then refuse to take those on benefits.

Year-long demonstration projects are currently taking place across the country to test direct payment to tenants, including different options for switching benefit to landlords.

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